A Fintech-Inspired Approach to Contact Tracing



By Chris Brummer*

China tracks individuals without their permission. And the United States won’t do so at all. The question, increasingly, is whether there’s something in between.

The objections to China’s approach are pretty obvious. The crisis offers an opportunity for the country’s leaders seeking to extend the authority of China’s Communist Party to exercise more surveillance over its people than ever before. As I’ve covered on the Fintech Beat podcast, new control measures exerted by the state have included mandatory registration requirements, cell phone movement tracking, and traffic blockades and checks, all designed to keep tabs on individuals and their movement.

The advantage of China’s approach, whatever its flaws, is that it allows nuanced, pinpoint decisions with regard to the novel coronavirus’s spread. It also permits pinpointing future trouble spots and enables people to avoid them.

Meanwhile, the U.S. — at the federal and state levels — has had a hands-off approach to close-level tracking. The reasons are myriad, including possible constitutional questions and rights surrounding privacy. Moreover, the politics of heavy-handed government control would be messy. In a world of misinformation, conspiracy theories, and skepticism of government, obligating all Americans to participate in a contact-tracing regime could exacerbate already deep social tensions. Riots would not be unimaginable.

A fintech-inspired alternative

But there are interesting alternatives. One that’s crossed my mind, inspired by fintech open banking debates, and recent pilot projects involving Apple and Google, could entail the government introducing a voluntary system, and even paying people to track their movements. Under this approach, the government could approve of or help develop special apps asking users to opt in to contact tracing. Volunteers would load software to their cell phones, allowing the device to broadcast a unique anonymous identifier to the Centers for Disease Control and Prevention and to devices of persons with whom the cell phone owner comes in contact.

The novel part of this approach is that it would not only be voluntary, but it would also incentivize people to participate in contact tracing in ways that have frustrated government officials elsewhere. The Economist has, for example, observed that even when given the opportunity, not all phone users have chosen to download apps that could be used to combat the outbreak. In Singapore, only a sixth of the country’s population, far fewer than the 60 percent that might be needed for an accurate picture, volunteered to do so. And even in Iceland, the best performer, only 40 percent of the population has opted in.

However, significant financial incentives could be a game changer — as well as conceivably pave the way for even greater financial assistance for those struggling to make ends meet. The same device relied on for tracking — the cell phone — could double as the instrument through which financial rewards are offered insofar as payments could be loaded into software on a mobile device.

If and when an individual contracted the disease, the person’s information could be uploaded and others notified about their contact with the infected person, and essential data shared with the CDC to help create more robust policy responses.

In some ways, this kind of program would be no different from the Transportation Security Administration’s Precheck program. More personal data would be offered in return for government benefit, in this case an additional stimulus check.

But as in Life, there are Tradeoffs…

It’s not a magic bullet, however. For one, the usefulness would depend in large measure on individuals notifying authorities that they have COVID-19. As a result, some system would need to be established, including a possible additional bonus payment, to incentivize notification. At the same time, the government would likely have to make credible commitments not to disclose the names of the infected. Or the government could subsidize (or make free) COVID-19 testing for individuals who agreed to let testing firms release anonymized data results.

Additionally, there is a risk that the program would end up over-tracking the poor and minorities — or under-tracking the rich, depending on how you view it — since those with the most modest incomes are the ones most likely to be interested in financial assistance. That said, the coronavirus is by all accounts disproportionately impacting the working class and communities of color — precisely the people for whom more deliberate, thoughtful government action is needed. Additionally, it’s clear that even without the assistance, some wealthier people will still opt in, out of an interest in the public health — just likely not enough in and of themselves to provide sufficiently robust tracking.

In any event, what is clear is that more information will be necessary to climb out of the public safety and economic morass that the novel coronavirus is creating.Innovative approaches to generating data — whether it be in fintech or elsewhere — will undoubtedly be needed for policymakers who are themselves required to devise innovative policy solutions.

* Chris Brummer is the editor of Fintech Policy, a Georgetown law professor and host of the Fintech Beat podcast, produced by CQ Roll Call. You can also subscribe to his free newsletter for weekly posts like this.

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